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Supreme Court direction to Slum Rehabilitation Authority, Mumbai, a big relief for slum dwellers and full stop to 3 decade long litigation.

January 4, 2018




Slum Rehabilitation in Mumbai, SC Judgment

The Judgment starts with these words "A dream turned into nightmare. The Dream of over 800 slum dwellers who also happens to be owners of the land of having a permanent roof over it their heads has not turned into reality for more than three decades".


A Bench of Supreme Court Judges Justice Madan B Lokur and Justice Deepak Gupta passed direction in Civil Appeal No. 18121 of 2017, SUSME Builders Pvt Ltd vs. Chief Executive Officer, Slum Rehabilitation Authority and Ors to start process for rehabilitation of the affected people. The apex court directed SRA to file Status Report by 31.03.2018 and listed the matter for further hearing on 9.4.2018.


The facts of the Case are the land in question measuring 23018.50 square meters is situated in the heart of Mumbai i.e. Santacruz (East), Mumbai. This land earlier belonged to the Ardeshir Cursetji Pestonji Wadia Trust, hereinafter referred to as 'the Trust'. A slum had developed over the said land. The slum dwellers formed an Association known as 'the Shivaji Nagar Residents' Association. It appears that the Trust had initiated some litigation for eviction of the slum dwellers. On 19.03.1980 a consent decree appears to have been passed in this litigation whereby the Trust agreed to transfer the entire land to the slum dwellers in case the slum dwellers formed a society. The slum dwellers thereafter constituted a society in the name and style of Om Namo Sujlam Suflam Co-operative Housing Society. About 800 slum dwellers formed the Society, which was registered under the Maharashtra Co-operative Societies Act, 1960. In furtherance to the decree, the Trust executed a deed of transfer in favour of the Society transferring the entire land to the Society on 20.02.1985. Thus, this is a unique case where the slum is owned by the Society of which the slum dwellers themselves are the members. The slum dwellers are, therefore, also the owners of the land in question.

The land in question was declared to be a slum under Section 4 of the Maharashtra Slum Areas (Improvement, Clearance and Redevelopment) Act, 1971 firstly on 16.08.1977 and again on 07.12.1983.

On 15.09.1985, a General Body Meeting of the Society was held and in this meeting it was decided to appoint M/s. Susme Builders Private Limited, hereinafter referred to as 'Susme', to develop the property. Thereafter, a development agreement was entered into between the Society and Susme on 27.02.1986. It was agreed that there were about 800 occupants on the land in question and each one of the slum dwellers would be provided accommodation measuring 240 sq. ft. built up area with carpet area of 190 sq. ft. The agreement also contained a condition that the slum dwellers could purchase additional area of 60 or 110 sq. ft. by paying for the extra area at the rate of Rs. 350 per sq. ft.. The project was to be completed within a period of 5 years. Consequent to the agreement, the Society executed a power of attorney in favour of the nominee of Susme on 07.04.1986 virtually empowering it to act on behalf of the Society.

Admittedly, no work was done as per the terms of the agreement and nothing was constructed during this period. The stand of Susme is that during the period some public interest litigations were filed, hence the plot of land was not developed.

Thereafter, the Development Control Regulations for Greater Bombay, 1991 under the Maharashtra Regional & Town Planning Act, 1966 (for short 'DCR') were enforced. As per these DCRs, each one of the slum dwellers was entitled to a tenement of 180 sq. ft. free of cost. Therefore, the general body of the Society met on 30.10.1994 and passed a resolution that the earlier agreement be modified and a tenement of 225 sq. ft. carpet area be given to each slum dweller. Thereafter, letter of intent in terms of the DCR was issued in favour of the Society and Susme on 05.04.1995. As per this letter of intent, each slum dweller was to be allotted 225 sq. ft. area. Susme was also to comply with the guidelines laid down for redevelopment of notified slums. It was made clear that first the existing slum dwellers were to be rehabilitated and only thereafter, free sale could be done in the open market. Susme was specifically directed to carry out the activities as per the activity chart and in terms of Regulation No. 33(10) of the DCR within five years from the date of issue of the commencement certificate. Thereafter, another agreement was entered between the Society and Susme on 10.07.1995 and in terms of this agreement each slum dweller was entitled for a tenement of 225 sq. ft.; 180 sq. ft. free of cost and 45 sq. ft. at the cost of Rs. 14,350/-.

In terms of the letter of intent dated 05.04.1995 and the agreement, Susme was to construct 12 buildings of ground plus seven floors for re-housing the slum dwellers and project affected persons on about 11,000 sq. mtrs. of land and remaining 12,497 sq. mtrs. was to be developed for the purpose of free sale. During the pendency of this agreement, Susme constructed two buildings in which 128 slum dwellers were rehabilitated. This was the only progress which took place.

The DCR was amended in 1997. Under the new DCR, each slum dweller was entitled to a flat having carpet area of 225 sq. ft.. Naturally, the slum dwellers wanted, that as per the amended DCR, which was more beneficial to them, they should be granted a larger flat having carpet area of 225 sq. ft.. Therefore, another meeting of general body was held on 10.08.1997. In this meeting it was resolved that fresh negotiations be held with Susme and that Susme should carry out further development under the amended Regulation 33(10) and that 70% residents should consent for the redevelopment. Thereafter, another supplementary agreement was entered into between the Society and Susme on 07.01.1998. In this agreement, it was stated that there are 867 occupants, out of which 825 are occupying residential premises, 27 are occupying shops and 15 are occupying industrial units. This agreement also provided that tenements to be provided to each of the residential occupants would have a carpet area of 225 sq. ft.

Susme, on behalf of the Society, also moved the SRA for permission to convert the old SRD Scheme into a new slum rehabilitation scheme. The SRA granted letter of intent on 27.01.1998 and approval was granted for conversion of the scheme. Clause 19 of the letter of intent provided that Susme would submit the agreements with photographs of wife and husband in respect of all the eligible slum dwellers before issue of commencement certificate for sale building, or three months as agreed by the developer, whichever is earlier.

One writ petition was filed by the Shivaji Nagar Residents' Association being Writ Petition No. 1301 of 1999 challenging the sanction by the SRA in favour of Susme on the ground that Susme had not obtained consent of 70% of the slum dwellers. The said writ petition was dismissed on13.12.1999.

Thereafter different petitions dragged the matter for many years. The court in its Judgment said that:

"85. This, as pointed out earlier, is a very unusual case. We Have held that both the contesting developers are not entitled to any relief. It is our duty to ensure that these owners who also happen to be slum dwellers do not live in sub-human conditions for eternity."

"86. We are not only disappointed with the conduct of Susme, but also with the conduct of those persons who were the office-bearers of the Society whichever faction they may belong to. It is more than obvious that the two rival developers and the office-bearers of the Society were playing with the lives of large number of slum dwellers. We are not going into this issue in detail but, if we were to carefully examine the various agreements entered into by Susme with the Society, we find that though the members may have been entitled to larger flat in each subsequent agreement but, in fact, it was the builder, who was the biggest gainer as the advantage of higher FSI was cornered by the builder. Only a small portion of this advantage was being transferred to the slum dwellers and a large portion was being retained by the builder. Another important aspect is that, in this case, it is the occupiers who, through the Society, are also the owners of the land. In our view, in addition to the flats which they would be entitled to as slum dwellers or occupiers or encroachers of land, they should have been given some benefits as owners of the land. When a slum, owned by any authority or person, is handed over to the developer, in addition to rehabilitating the slum dwellers, the developer also has to compensate the owner. We see no reason why, in the present case, the slum dwellers, who are the owners, should also not be given some adequate compensation for the land which they own. It is these 800 plus slum dwellers, who own this 23018.50 sq. mtrs. of land, which would be valuing thousands of crores of rupees and, therefore, we see no reason why the slum dwellers, who also happen to be the owners of the land, should also not be compensated for the price of the land."

Now the Supreme Court invoked power under Article 142 and passed the following directions:

  1. That the SRA shall within three weeks of the receipt of this order, invite letters of interest from renowned builders/developers, who have the capacity and experience to take up such a large project by issuing advertisements in not less than three newspapers having wide circulation in Mumbai, one each in English, Hindi and Marathi;
  2. The advertisement may be brief but all necessary details must be incorporated in the advertisement. The details of the project including a copy of this judgment should be made available on the website of the SRA;
  3. After the letters of interest are submitted, the SRA shall consider which is the best offer and while considering the best offer, it shall ensure that the terms offered to the occupiers are in no manner disadvantageous to them when compared to the last offer made by Susme in regard to the area of flat offered, the nature of construction and other facilities available on the site. The SRA must, while evaluating the proposals, take into consideration the past record of the party/person expressing interest: it shall also take into consideration the financial viability of such party/person and, therefore, it may ask such party/person to submit all the documents to support their financial viability. In case of any doubt, the SRA can move appropriate application before this Court;
  4. The persons who express interest must be willing to give an assurance that they will submit plans within one month of the approval of their proposal and all the concerned authorities must, within 15 days thereafter, raise objections, if any, giving the successful bidder a chance to remove the objections, if any, within one month thereafter;
  5. Thereafter, the concerned authorities should ensure that the plans are approved and sanctions granted latest within two months of the submission of the original plans. The successful developer should undertake to complete the rehabilitation of part of the project to rehabilitate all eligible occupiers/slum dwellers within a period of two years from the date of sanction of the plan. The successful bidder must give a bank guarantee of Rs. 200,00,00,000/- (Rupees Two Hundred crores only) to ensure that it does not violate the terms and conditions of the rehabilitation scheme. In case of violation of the terms and conditions of the rehabilitation scheme without reasonable cause, the SRA will be entitled to invoke the bank guarantee, after giving notice to the developer;
  6. Keeping in view the fact that the slum dwellers are also the owners, the developers may also indicate what benefit they will give to the members of the Society either in cash or in kind by means of giving additional built up area out of their own free sale area to such members of the Society;
  7. The SRA shall monitor the progress of the Scheme to ensure that it is completed within the time granted by this Court;
  8. No Court or authority shall pass any order which will in any manner affect the implementation of the directions/orders issued by us;
  9. The Society, its members, the SRA and all concerned will render complete assistance to the builder/developer, who is awarded the project by the SRA; and
  10. That all pending litigation shall be disposed of in view of the aforesaid orders passed by us and shall be disposed of by the Court (s) accordingly.




Read the Judgment of Supreme Court dated 4.1.2018



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